A, B, and C class assets with an average market rent between $500 and $1,500 per month1. For operating efficiency Ackermann is targeting properties with a total gross income of at least $1 Million per year.
Medium sized properties valued from $5 to $35 Million consisting of 150 – 450 units.
Competitive property amenities are essential.
A and B class location with quality lifestyle amenities. Key economic drivers providing strong employment such as state capitals, markets with multiple colleges and universities and markets with significant healthcare employment. Metropolitan markets and submarkets within 150 miles of Cincinnati: Cincinnati Lexington Indianapolis Columbus Louisville
DEBT AND EQUITY EXPECTATIONS
The fund will leverage its equity by financing approximately 70% or 80% of the total cost to acquire each asset.
Permanent, fixed rate, non-recourse debt with terms of five to ten years and amortization schedules of 25 to 35 years. Short term recourse debt with terms of 12 to 36 months if required to secure an opportunity.
As properties appreciate in value, there may be opportunities to refinance the existing debt allowing the fund to return a portion of the investor’s equity.
INVESTMENT CYCLE EXPECTATIONS
The typical life of an apartment investment is between five and ten years. An earlier sale is possible if the target return can be achieved.
Initial cash-on-cash returns targeted above 8%.
Long-term cash-on-cash returns targeted above 10%.
Internal rate of return for the investment after the sale of the property over a period of three to ten years is targeted between 12% and 15%.
1Certain investments may fall outside this range.